Almond Proposes Little New Spending

Providence, RI – Governor Lincoln Almond's final state budget contains no major spending cuts, but no major increases either. The governor submitted a $5.3 billion dollars spending plan Wednesday. That is less than 1% more than the budget enacted for the current fiscal year.

To reach that spending level, Governor Almond proposed a series of initiatives to boost state revenue. They include increased fees for state beaches and parks, an increase on the tax on cigarettes, and a windfall payment from the national tobacco settlement. The governor wants to take a payment of nearly $500-million from tobacco companies, in exchange for smaller annual payments in the future.

"If you're not going to use these revenues, you have got to look where you're going to cut. We would not be giving an increase to higher education without the these funds. We wouldn't be giving an increase to elementary and secondary without these funds, so those are the trade-offs.

Under the budget proposal, state education aid to most cities and towns would go up only 1%. Many education officials said that is not enough at a time that the state is trying to raise school standards. They predicted school districts would be forced to seek additional money from increases in local property taxes.

"If state aid to education doesn't increase, it's going to place an increased burden on the backs of property owners who are going to have to pay for the increases sought by school superintendents around the state," said Daniel Beardsley of the Rhode Island League of Cities and Towns.

There would be an increased burden on smokers and users of state beaches and parks as well. The governor is proposing an additional 35 cents per pack tax on cigarettes and higher fees for state beaches and parks. The governor argued higher taxes on cigarettes could discourage smoking. The current cigarette tax is $1 per pack. It's lower than in neighboring states. But retailers worry it would hurt their business.

"People are going to go next door. We're not isolated here, its so easy to get to Connecticut or Massachusetts and that hurts the local businesses," said Terrence Martiesian of the National Federation of Independent Business.

The budget goes to the General Assembly, which will now prepare its own state spending plan. Legislative leaders said Wednesday that they want to consider other ways of increasing state revenues and might want to boost spending in some areas.

"If we're gogin to do these little minimal taxes, on specific items to such a degree, is it not better to say, 'lets look at an increase in one of the other taxes, or lets take a serious look at cutting some of the other expenditures that may not have been looked at," said State Rep. Gordon Fox, who chairs the House Finance Committee